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The difference between residency and citizenship

Malta’s warm climate, cosmopolitan lifestyle, safe environment and food culture make it a popular destination for expats to make a new life and resettle with their families.

Apart from marriage and naturalisation, Malta offers two very attractive options for relocation – residency and citizenship.

Both have their benefits and the choice of which option to go for largely depends on a prospective applicant’s particular circumstances.

Citizenship of Malta

The Maltese passport is one of the most coveted in the world. If you want to become a citizen of Malta, then you should apply under the Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment (CBE), recognised as one of leading citizenship programmes in the world.

The Malta CBE allows applicants to acquire Maltese citizenship after a strict due diligence process and satisfying other requirement, including holding residency status in Malta for twelve or thirty six months prior to submission of the Citizenship application.

The applicant has two options to attain citizenship depending on the size of investment to the Government of Malta. Citizenship can be achieved either in 36 months for a reduced investment of €600,000 or 12 months with an investment of €750,000. In addition, a property worth at least €700,000 must be purchased. Alternatively, a propertly may be rented for at least €16,000 a year. Purchased or rented property to be retained for a minimum period of 5 years from the date of issue of the certificate of naturalisation. An indefinite private health insurance covering all applicants of the CBE is required.

Maltese citizenship status is inherited by future generations even if born outside of Malta. A key benefit of citizenship is that apart from the freedom to travel within Schengen, a Maltese passport holder has the right to live, work, and study in all 27 EU and 4 EEA member states as per EU Treaty Rights as Malta has been a member of EU since 2004. The Maltese passport also allows for easy travel to Africa and visa free travel to 184 countries.

Maltese citizenship also offers a free healthcare system, excellent primary, secondary and tertiary education.

Malta also does not have any inheritance or succession taxes. The main applicant and eligible dependents obtain these rights under the Malta CBE.

Residency in Malta

There are several residence programmes in Malta, according to nationality and the basis upon which one is applying. The Ordinary Residence Programme applies to European Union, European Economic Area nationals, as well as nations from Switzerland, Liechtenstein, Norway and Iceland. It is a programme which takes 4 – 6 weeks. Third country nationals wishing to work in Malta should apply for a single permit or work permit, which would normally take 2 – 3 months to be issued.

The Malta Permanent Residence Programme is available to nationals from third countries. The Global Residence Programme and the Residence Programme are tax programmes which set a minimum tax to be paid per annum to the State of Malta. The former applies to non-EU nationals while the latter applies to EU nationals.

If you become a successful applicant for Malta residency, but choose not to domicile there, you are taxable on a remittance basis. This means that such tax residents would not be taxable on foreign income which is not remitted to Malta. Residents are taxed on income sourced in Malta and/or income remitted to Malta. Residents are also not liable to capital gains outside of Malta, whether remitted into the country or not.

Because Malta is within the Schengen Area, residency allows freedom of movement within the said area. Under the residency programmes, eligible dependents may also be covered depending on the residency programme undertaken.

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